General Motors to End Production in Australia

General Motorsannounced plans Tuesday to improve its global performance by discontinuing vehicle and engine manufacturing, and significantly reducing its engineering operations in Australia by the end of 2017.

General Motors' decision will impact approximately 2,900 positions during the next four years, with 1,600 from its Elizabeth vehicle manufacturing plant, and 1,300 from its Holden Victorian workforce. However, the sales and service part of Holden vehicles will be unaffected, and will still have an extensive network of dealers across Australia and New Zealand.

CEO Dan Akerson had this to say, in a press release: "The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country, including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world."

A large reason behind this move was the increase in Australia's dollar. At the Australian dollar's peak, making things in Australia was 65% more expensive than a decade earlier, according to GM.

Because of this decision, General Motors will be taking pre-tax charges in the fourth quarter between $400 million and $600 million. The charges will consist of non-cash asset impairment, including property, plant, and equipment. The charges will also consist of exit-related charges including certain employee severance-related costs.


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